Focus for the north

Tianjin, with a population of over 8 million, is a recently developed city straddling the Haihe River, 137km to the southeast of Beijing. Its natural role is as regional focus for the whole of north China.

Natural resources

The nearby Dagang oilfield is one of the country's leading oil and gas producers, supplying Tianjin with 400 cu m of gas and producing 4.6m tonnes of crude oil annually. Tanggu, Tianjin's port, is the centre for exploration of China's most promising offshore prospects, the Bohai oilfield, with an annual production of 10m tonnes. There are verified coal reserves of over 500m tonnes at Xiacang and Beitan with further supplies readily available from Tongshan (Hebei province) 100km to the northeast.

Communications

Tianjin has the second largest port in China which includes the country's largest container terminal. The port caters for the northwestern interior of China rather than the northeast which uses Dalian or Qinghuangdao as gateways.

A 50/50 joint venture shipping company, Sinokar, between South Korea's Tongnana Shipping Co and China's Sinotrans Co, has been approved to operate neutral container ships sailing directly between Shanghai and Tianjin and Inchou and Pusan in South Korea. The Beijing-Tianjin-Tanggu expressway, will reduce travel time between Tianjin port and the capital by half. The city boasts the best railway station and marshalling yards in Asia. The city also has a 7.4km underground railway.

Industry

Tianjin has a relatively diverse industrial base. Heavy industrial products are particularly important; iron and steel, vehicles and heavy machinery. Tianjin's salt and alkaline industry has a long history, the Chenglu Salt Field is China's largest with an annual output of over 2m tonnes.

Light industry has expanded rapidly and includes the manufacture of carpets, electronics, paper and foodstuffs.

The priorities for the next three years will be based on:

* the motor industry where there are plans to increase production from 30,000 vehicles to 200,000 by the year 2000; * petrochemicals ? at present Tianjin's chemical industry can meet only 30 per cent of the municipality's industrial needs;
* electronics where the aim is to move production up-market into personal computers, mini-computers and main frame from the current production of televisions, watches and consumer electrical goods, such as refrigerators.

Tianjin's 1.2 sq km free trade zone was approved in May 1991 and now contains Chinas first customs bonded warehouse.

Trade

One of China's 14 open coastal cities, Tianjin exports only 10 per cent of its own industrial output. Half Tianjin's ex-ports of manufactures are textile pro-ducts or garments. 40 per cent of exports came from other provinces and 25 per cent of imports were retained for local use. 21 per cent of all Tianjin's trade is with Hong Kong.

Projects

It is estimated that the city of Tianjin is still 10 per cent short of adequate electricity supply. Two new power plants (of 200,000 KW and 970,000 KW respectively) are under construction and there are plans for another five plants, with a combined capacity of 2m KW to be built by 1995.

Prospects

Tianjin suffered from dwindling revenues as more enterprises fell into the red in 1988. This was largely attributed to the soaring prices of raw materials and energy. While most of Tianjin's enterprises buy as much as 70 per cent of their raw materials at high market prices their finished products are sold at government controlled prices. In spite of in-creased foreign investment, the municipality faces the prospect of rising debt obligations (680m RMB in 198$ compared with 300m RMB in 1987) and power shortages are an added problem. Central government has allowed Tianjin to retain nearly 50 per cent of its revenue for local development, however, development of the port, roads and railways, water supply and housing are needed to provide Tianjin with the infrastructure for the next leap forward in manufacturing when the problems of inflation are under control.

Foreign investment
There are 1,300 foreign-funded investments in Tianjin. Over 80 per cent are engaged in industrial production. Half are with Hong Kong companies, with Japanese an US companies the next largest investors. *

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